Elective recovery funding regime must not unfairly penalise trusts

25 February 2022

Commenting on the second consultation on the 2022/23 national tariff, published by NHS England and NHS Improvement, the chief executive of NHS Providers, Chris Hopson said:

"Trusts continue to do all they can to reduce care backlogs as quickly as possible and meet the stretching ambitions set out in the recently published recovery plan.

"Reducing care backlogs will depend on a range of factors including effective collaboration between all system partners, the strength and realism of system elective recovery plans and the right financial regime.

"Trusts must be properly rewarded for strong performance and compensated for the additional costs incurred by delivering above their targets.

"But trusts also have a significant fixed cost base, targets need to be deliverable and there can sometimes be very good reasons for trusts missing stretching targets.

"There is therefore concern among trust leaders that a 75% deduction rate as opposed to the originally proposed 50%, if activity levels fall below target levels for reasons beyond trusts' control, could mean services being underfunded.

"Reasons beyond a trust's control in 2022/23 could include the impact of current and future waves of COVID-19, pressures in urgent and emergency care, the impact of current workforce shortages, and pressures in social care given their impact on bed capacity.

"Trust leaders tell us that all these factors are constraining them at the moment and their impact varies considerably by trust.

"It's right to set very stretching targets here, given the need to treat patients who have been waiting for too long.

"But it's also vital that any financial regime is appropriately flexible and recognises the legitimate variation that may occur here. Otherwise trusts risk being driven into financial problems that will affect their ability to deliver safe and effective care.

"We also need to remember that significant care backlogs exist in mental health and community services and we need appropriately funded plans to tackle these backlogs too."

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